FreshMart, a supermarket, is exploring the possibility of introducing fresh juice bars in their store. The company expects that the revenue generated from the new juice bars will be $157,000 per year. FreshMart currently offers organic produce with annual sales of $77,000. While many of the juice bar sales will be to new customers, FreshMart estimates that 47% of their current organic produce customers will switch and start using the juice bars.The level of incremental sales associated with introducing the new juice bars is closest to:(Round your answer in dollars to full interger, e.g. put 1204 if your answer is 1204.4243.)
Question
FreshMart, a supermarket, is exploring the possibility of introducing fresh juice bars in their store. The company expects that the revenue generated from the new juice bars will be 77,000. While many of the juice bar sales will be to new customers, FreshMart estimates that 47% of their current organic produce customers will switch and start using the juice bars.The level of incremental sales associated with introducing the new juice bars is closest to:(Round your answer in dollars to full interger, e.g. put 1204 if your answer is 1204.4243.)
Solution
To calculate the level of incremental sales associated with introducing the new juice bars, we need to consider the new revenue that will be generated and the loss of revenue from the organic produce sales due to customers switching to the juice bars.
-
The new revenue generated from the juice bars is expected to be $157,000 per year.
-
The loss of revenue from the organic produce sales is estimated to be 47% of the current annual sales of 77,000 = $36,190.
-
Therefore, the level of incremental sales = new revenue - loss of revenue = 36,190 = $120,810.
So, the level of incremental sales associated with introducing the new juice bars is closest to $120,810.
Similar Questions
Graham Corporation has 1,000 cartons of oranges that were harvested at a cost of $26,500. The oranges can be sold as is for $30,000. The oranges can be processed further into orange juice at an additional cost of $12,500 and be sold at a price of $46,000. The incremental income (loss) from processing the oranges into orange juice would be:Multiple Choice$33,500.$3,500.$(16,000).$(3,500).$16,000.
Graham Corporation has 1,000 cartons of oranges that were harvested at a cost of $30,400. The oranges can be sold as is for $36,400. The oranges can be processed further into orange juice at an additional cost of $13,000 and be sold at a price of $53,000. The incremental income (loss) from processing the oranges into orange juice would be:
Fresh Food Catering Ltd’s capital expenditure for the current year for new equipment was $91,700. Current liabilities and non-current liabilities were $69,100 and $284,900 respectively. Sales for the current year were $351,400, and cash flows from operations totalled $106,900. Compute the cash adequacy ratio, cash flow ratio, debt coverage ratio and cash flow to sales ratio.Important:For any amounts, please don't include the dollar sign ($) or any thousands separator - i.e., $12,000 should be written as 12000.Please round all answers to 2 decimal places (e.g., 14.55).Cash adequacy ratio Answer 1 Question 1 timesCash flow ratio Answer 2 Question 1timesDebt coverage ratio Answer 3 Question 1timesCash flow to sales ratio Answer 4 Question 1times
Juice Drinks returned $25 of defective merchandise to its supplier. Demonstrate the required journal entry that Juice Drinks will record for the return, assuming the purchase was made on account and that Juice Store uses the periodic inventory system.Multiple choice question.Debit Accounts Payable $25 and credit Cash $25.Debit Purchases Returns and Allowances $25 and credit Accounts Payable $25.Debit Accounts Payable $25 and credit Merchandise Inventory $25.Debit Accounts Payable $25 and credit Purchases Returns and Allowances $25.
You go to the local fruit stand to get some fresh produce. The person in front of you got 6 oranges and 8 pears for $13. Your total came to $11 for 4 oranges and 10 pears. Write a system of equations given this information.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.